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The IRS announced Thursday that it will start a one-year pilot program next month that will waive compliance penalties for some small business plan sponsors.

On its website, the IRS says that it “is reaching out to certain small businesses that maintain retirement plans and may have been unaware that they had a filing requirement.”

In filing current and prior year forms during the pilot program, sponsors can avoid penalties, though it’s important to note that those sponsors that have already been assessed a penalty are not eligible for the program.

The IRS projects the program will bring a significant number of small business owners into compliance.

Compliance issues are a deterrent to extending workplace retirement plans to small businesses. According to the U.S. Small Business Administration, almost 72 percent of employees in small companies don’t have access to retirement plans in the workplace, and only 19.5 percent of employees of small businesses participate in a retirement plan.

The IRS seems to be addressing the reality that small businesses, and their employees, are at a significant disadvantage when it comes to preparing for retirement. Census data shows that 98 percent of all businesses have fewer than 100 employees. Those firms employ 35 percent of private sector payrolls.

In the smallest businesses — those with fewer than 10 employees — only nine percent of workers have access to an employer sponsored plan. The number jumps to 36 percent in firms with up to 100 workers. In the biggest companies — those with more than 500 employees — the rate of plan participation jumps to 60 percent.

Of all plans, large and small, audited last year by the DOL, 75 percent had compliance issues.

Eligibility for the pilot program is limited to small business “owner-spouse” plans, and one-participant plans — plans that only cover the owner, owner’s spouse, or the partners and partners’ spouses in the business.

Employers who don’t file an annual Form 5500 series face up to $15,000 of penalties per return. Penalties on multiple can be waived through the program, and employers that have delinquent returns on more than one plan can also request relief.